EURUSD Sellers Await the Price to Hit the Diagonal Resistance

EURUSD Analysis – Sellers Await the Price to Hit the Diagonal Resistance

EURUSD sellers await the price to hit the diagonal resistance. The EURUSD overall market has been descending the crest since the beginning of the year. The market formed a new swing high on the first day of April 2022. The swing leg was expanded into the previous support at 1.0330, which formed the swing low of this swing leg or impulse. Prices then retraced into the equilibrium (50% Fibonacci retracement level) of the swing impulse before resuming the motive trend downward.

EURUSD Significant Zones

Demand Zones: 0.9540, 0.9100

Supply Zones: 0.9950, 1.0330

Ever since the 50% Fibonacci retracement level was used as a re-entry level for the EURUSD sellers in June 2022, the market has been crashing massively below all supports. On the 21st of April, 2022, the market began to respect a new diagonal resistance across the candlestick swing highs. Similarly, on the 12th of May, the market began to respect new diagonal support as it continued to descend downward. The Simple Moving Average (SMA) indicator shows the dominance of the bears in the market as its previous highs remain unviolated.

On July 14th, 2022, the price bounced off the 0.9950 support level. This support level coincides with the –50% Fibonacci of the swing impulse formed in April 2022 on the daily time frame. The prices’ reaction to the support level revealed the intention of the EURUSD sellers in the market as prices gyrated around the support level. On the 10th of August, the bulls could not break beyond the resistance at 1.0330. The aggressive selling at the resistance squeezed the bulls out of the market.

Market Expectation

Before the current bullishness in the market as revealed on the four-hour chart, the EURUSD sellers had been crashing down the market since the 12th of September. The massive crash was due to the fair value gap, while the current bullishness was due to the bullish divergence indicated by the RSI indicator. The market is expected to keep rallying upward until the 0.9950 supply zone or the diagonal resistance is reached.

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